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Nation, State, and Economy (Lib Works Ludwig Von Mises PB)

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Nation, State, and Economy is an early effort by Mises to do what he accomplished in his 1944 book Omnipotent Government. Mises wrote this book at the close of World War One in effort to explain why this war occurred. Mises explains some concepts that show up in his later work: capital accumulation bias, the nation as a speech community, the decline of liberal thought in Europe and the rise of socialist/nationalist beliefs.

One key element is missing: his calculation critique of socialism. Mises started down an intellectual path towards the calculation critique of socialism when he wrote The Theory of Money and Credit. It was in this earlier work that Mises began to see the significance of monetary calculation. Yet, Mises did not fully grasp the significance of money in capitalism when writing his 1919 book. Ironically, Mises came to recognize what was missing in Nation, State, and Economy just after it came out. In 1919 Mises wrote his article Economic Calculation in the Socialist Commonwealth. From then on economic calculation would be the central issue in his economic and historical analysis.

Nation, State, and Economy is important to those who are interested in the evolution of Austrian ideas. It also has some interesting history of the First World War (that is, interesting to those who want to understand history). As such, this book has a relatively narrow audience. But it is a well reasoned gem for the few who find such subject of interest.

Ludwig Von Mises perhaps deserves the honourable title of "last of the 19th Century classical liberals". This is despite the fact that all his writings are works of the 20th century. This is not to say that he has been made obsolete or irrelevant, far from it, but his work has generally been unfashionable in the 20th century, even by those who would be considered his intellectual and political allies. In a sense Mises debates the issues on his own terms not by following or chasing the coat tails of others.

"Nation, State and Economy" was Mises' first book, published in 1919, it discusses the great war and in some ways anticipates the events to come. Despite the author's pedigree as a former Austrian treasury official and pioneer of the Austrian school of economics, this is really a book best pigeon holed as political sociology than economics per se. Originally written in German and, assuming a greater knowledge of German / Austrian history than I possess, I had to rely upon detail provided in the forward to help me through.

The book covers wide intellectual ground and has been compared to John Maynard Keynes' "Economic Consequences of The Peace", written about the same time with much of the same concerns, as it's most comparable peer.

Perhaps the section that most interested me, and it should be of interest to those, including modern liberals and social democrats, not normal Mises readers, was his discussion of the weakness of 19th century liberalism in Germany and Austria. Elsewhere in the west liberalism, nationalism and democratic reform marched side by side as brothers in arms. But what happened in Germany and Austria?

Peter Viereck has argued that in the Germanies, the idea of "volk" triumphed when and where liberalism and democracy was defeated. Viereck argues that the German soul was split between rival western "liberal" looking and northern "volkish" looking hobgoblins. Mises, ever the practical economist, who sees nations as essentially linguistic constructs, offers a more down to earth interpretation.

Liberalism and democratic thought flourished among the German peoples of Prussia and Imperial Austria, but the multi-ethnic demographic realities of the German colonization in Eastern Prussia and the Austrian Empire meant that any advances for democratic majoritarian self rule would come at the price of retreat for the social, economic and political status of these Empire's eastern German subjects. Thus many liberals and indeed socialists found it easier to compromise with the Old Regime authoritarians, elsewhere the mortal enemy of liberals and democrats, than abandon their German speaking peers. The compromises made by Prussian liberal democrats were leveraged across the whole of the Second Reich as Bismark unified the central Germans.

Although Mises doesn't say it, in a sense it's the Westerners, the French, British and Americans, where liberalism, democracy and (effective) linguistic homogenity worked in parallel who are the odd men out. The Austrian and German experience has probably more to tell us about the prospects of liberty and democracy in the ex-colonial Third World and the ex-communist Second World than all the ostentatious lovers of democracy layed end to end.

These issues of nationality, multiculturalism and the relation between language and liberty have a renewed urgency in the 21st century. Von Mises' "19th century" insights are probably of more use than those inherited from the 20th.